COMMITMENTS:

6 Months Ended

Jun. 30, 2019

Disclosure Text Block Supplement [Abstract]

Commitments

COMMITMENTS

Purchase Obligations

During the six months ended June 30, 2019, IDACORP's and Idaho Power's contractual obligations, outside the ordinary course of business, did not change materially from the amounts disclosed in the notes to the consolidated financial statements in the 2018 Annual Report, except that Idaho Power entered into four new replacement contracts for expiring power purchase agreements with hydropower PURPA-qualifying facilities and one new agreement with a solar PURPA-qualifying facility, which increased Idaho Power's contractual purchase obligations by approximately $24 million over the 20-year terms of the contracts. Also, in March 2019, Idaho Power signed a 20-year power purchase agreement, pending regulatory approval, to purchase the output from a 120 megawatt solar facility proposed to be constructed by a third party. The agreement would increase contractual obligations by $136 million over the 20-year term.

Guarantees

Through a self-bonding mechanism, Idaho Power guarantees its portion of reclamation activities and obligations at BCC, of which IERCo owns a one-third interest. This guarantee, which is renewed annually with the Wyoming Department of Environmental Quality, was $58.3 million at June 30, 2019, representing IERCo's one-third share of BCC's total reclamation obligation of $175.0 million. BCC has a reclamation trust fund set aside specifically for the purpose of paying these reclamation costs. At June 30, 2019, the value of BCC's reclamation trust fund was $125.9 million. During the six months ended June 30, 2019, the reclamation trust fund made no distributions for reclamation activity costs associated with the BCC surface mine. BCC periodically assesses the adequacy of the reclamation trust fund and its estimate of future reclamation costs. To ensure that the reclamation trust fund maintains adequate reserves, BCC has the ability to, and does, add a per-ton surcharge to coal sales, all of which are made to the Jim Bridger plant. Because of the existence of the fund and the ability to apply a per-ton surcharge, the estimated fair value of this guarantee is minimal.

In May 2019, the state of Wyoming enacted legislation that limits a mine operator's maximum amount of self-bonding. Idaho Power and the co-owners of BCC have 18 months to comply with the new regulations, which would reduce the portion of Idaho Power's guarantee of reclamation activities and obligations at BCC that Idaho Power is allowed to self-bond. As of the date of this report, Idaho Power believes the cost of any insurance, third-party assurance, or additional collateral that might be required for this guarantee due to the new law would be immaterial to the companies' consolidated financial statements.

IDACORP and Idaho Power enter into financial agreements and power purchase and sale agreements that include indemnification provisions relating to various forms of claims or liabilities that may arise from the transactions contemplated by these agreements. Generally, a maximum obligation is not explicitly stated in the indemnification provisions and, therefore, the overall maximum amount of the obligation under such indemnification provisions cannot be reasonably estimated. IDACORP and Idaho Power periodically evaluate the likelihood of incurring costs under such indemnities based on their historical experience and the evaluation of the specific indemnities. As of June 30, 2019, management believes the likelihood is remote that IDACORP or Idaho Power would be required to perform under such indemnification provisions or otherwise incur any significant losses with respect to such indemnification obligations. Neither IDACORP nor Idaho Power has recorded any liability on their respective condensed consolidated balance sheets with respect to these indemnification obligations.